The Tories should be glad that in George Osborne, they have a Chancellor with
a taste for battle, says Benedict Brogan.

Politics is George Osborne's strength, and his weakness. He masters its language but can't resist its temptations. He likes to win; he rejoices in the confusion of his enemies. Given an opportunity to smash Labour, he seizes it. The cuddly gentleness of coalition has not dulled his instincts. The Chancellor has the next election in his sights, and all he does is shaped by a desire to secure the Tory majority that he failed to deliver five months ago.

His statement yesterday must be seen in that context. The Comprehensive Spending Review gives the Coalition its financial framework for the next four years. To achieve the public expenditure cuts promised yesterday, Mr Osborne must make sure he and his colleagues deliver the reforms in welfare, health, education and elsewhere that will pay for them. Closing the deficit and halting the daily accumulation of debt remains the primary task. It is, as the Conservatives kept telling us in Birmingham two weeks ago, in the national interest.

But when he began his speech by declaring October 20 to be the day we "pulled back from the brink", he was also launching a political project that has at its core two objectives, both of which should be at the forefront of every Conservative mind between now and polling day: the destruction of Labour and the return of a majority Tory government. If anything, the party's slogan is incomplete: "Together in the national interest… against Labour."

In the Commons yesterday, we witnessed one of those moments in which the political landscape is suddenly illuminated. Labour find themselves with a youthful leader who is not battle-ready, a shadow chancellor whose engaging manner cannot disguise that he is not up to the task, and an economic policy that would be comical were the situation not so serious.

At Prime Minister's Questions, David Cameron eased his way past an embarrassingly ineffective Ed Miliband. Adopting a tone of bemused affability that only accentuated the Labour leader's feebleness, Mr Cameron had no difficulty making his point: "If you haven't got a plan, you can't attack a plan." The collective embarrassment of the Labour benches could be felt around the House.

Two years ago, the Chancellor was on the brink of his own career bankruptcy, laid low by his love of political intrigue and mischief-making. Yet in office he has been transformed into the commanding politician of the day, using the power of the Treasury to distribute largesse and smite his enemies. Yesterday's final flourish, when he turned the tables on Labour by revealing that his cuts were less severe than those previously proposed by Alistair Darling, was a surprise that visibly poleaxed the Opposition front bench.

It is worth considering the sources of the Chancellor's power. As Mr Cameron's closest adviser, he is embedded in Downing Street with his own suite of offices, where his principal advisers work alongside the Prime Minister's. He starts the morning there with the crucial 8.30 meeting that sets the direction for the day, and usually ends his evenings there after a session around the corner at the Treasury. He and the Prime Minister are engaged in a rolling conversation that carries on face-to-face, by text, by telephone, over impromptu sandwiches in the upstairs flat or meals at Chequers. Every aspect of Government policy and decision-making goes over his desk or through his BlackBerry.

This was never more apparent than during the spending review. The "quad" of Mr Osborne, Mr Cameron, Nick Clegg and Danny Alexander set the pace and agreed the details by disappearing into frequent closed conclaves – but it was Mr Osborne who pulled the strings. Ministers, negotiating their departmental cuts with Mr Alexander, were made to realise that if they appealed to the Chancellor over the head of the Chief Secretary to the Treasury, they would come out worse. So effective was this psychological threat that the final court of ministerial appeal, known as the Star Chamber, was never convened. "It was like the Inquisition. George just had to show the instruments of torture, but didn't have to use them," one ally explained.

His power will also have been reinforced by the spin operation that accompanied the review. Public expectations of terrible consequences were nurtured so well, in fact, that some frustrated Conservatives took to complaining that the whole exercise was being over-egged. They argued, with justification, that the £81 billion Mr Osborne promised to lop off public spending would still leave the state taking and spending as much as it was on the eve of the financial crisis. And they pointed out that, when spread over four years, the "eye-watering cuts" were not so different from the sensible approach taken by debt-heavy businesses and households to return themselves to financial health.

The returns on Mr Osborne's strategy were apparent yesterday, though. Most of the decisions had been trailed in advance, ensuring there were few surprises. Those measures likely to cause pain were sufficiently esoteric – mainly involving the retrenchment of particular benefits – that they will go unnoticed by the majority. Thanks to a recalculation of the amount of cash he will raise in removing Child Benefit from higher-rate taxpayers, Mr Osborne was able to mitigate the pain of cuts for schools, science, and transport infrastructure projects. As political theatre, it was a tour de force that deserved the hurrahs it received from his own side.

But did Conservative MPs realise quite what they were cheering? This is where the danger lies for Mr Osborne. Yesterday, we saw a confident Prime Minister dead-batting a useless leader of the Opposition, followed by a crafty, highly political Chancellor hammering the Opposition and pulling a last-minute rabbit out of the hat. If that sounds familiar to you, I was struck by the same unsettling parallel. We've had an all-powerful Chancellor before, and look where that got us.

But George Osborne is not Gordon Brown, and we should not let our distaste for the latter's style of politics blind us to the ambition of what the current Chancellor is trying to do. He has embarked on a course of action that is not without peril. He has chosen to put the burden of cuts on welfare, when we cannot be certain what the public reaction will be to having both benefits and public services reduced. He has vowed not to ask the taxpayer for more money in the future, without being certain he can stick to that promise. And he has set in train a revolution in public services that is overdue but fraught with political danger. Nothing could be further from the spendthrift dishonesty that was Mr Brown's hallmark.

If anything, Conservatives should rejoice that they have a Chancellor who delights in the fray. Labour may be rudderless, but it will still need to be defeated. Which is why politics still matters, and why it was necessary to nail the Opposition yesterday. Repairing the finances may be in the national interest, but if you are George Osborne, so is making sure Labour doesn't get another chance. Politics with a purpose, you might say.